Russia seeks to remove WTO restrictions
September 30, 2013, 7:58 pm

Several industries and markets in Russia have suffered due to WTO trade restrictions and rules [Getty Images]

Russia says it will work with the World Trade Organisation (WTO) to lift restrictions currently imposed on local companies, and to support its domestic producers.

“WTO membership places several obligations on us. We are going to actively use this instrument [WTO] to protect the interests of our domestic producers and exporters,” Economic Development Minister Alexei Ulyukayev said at the 12th Investment Forum Sochi-2013, which concluded Sunday.

Russia joined the WTO in 2012, and while it was hoped that expert opinion in business and competition policy would positively impact local markets, it was domestic producers who ended up suffering losses because of the organisation’s restrictive measures.

“We are working to have them lifted,” Ulyukayev said, adding that “last year, 16 such measures were lifted, and another five in the first half of this year,” saving hundreds of billions of dollars for Russian producers.

Another 70 restrictive measures are still in force.

Consumers have already felt a small change in the market because prices for imported goods have decreased – albeit not significantly – over the past year.

In the meantime, Russia’s local businesses are facing difficulties in competing with foreign producers who are now taking a larger stake in the domestic market.

In the long run, however, local producers should see more benefits as new foreign markets begin to open their doors to Russian exports.

Experts caution that a period of one year (since Russia joined the WTO) is not enough to gauge the effects of joining the international trading body.

“One year is not enough time to make a statement. We haven’t seen any real benefits or costs for the Russian economy from the WTO entry. And we have to understand that Russia joining the WTO doesn’t mean that all the measures which have to be implemented took place already,” Alexander Libman, assistant professor of international political economy at the Frankfurt School of Finance & Management, told The BRICS Post.

While institutions are being established to defend Russian businesses in the WTO, Moscow has over the past year discovered that it lacks expertise necessary for full-fledged operations within the international organisation’s framework.

57 founding members, many of them prominent US allies, will sign into creation the China-led Asian Infrastructure Investment Bank on Monday, the first major global financial instrument independent from the Bretton Woods system.

Representatives of the countries will meet in Beijing on Monday to sign an agreement of the bank, the Chinese Foreign Ministry said on Thursday. All the five BRICS countries are also joining the new infrastructure investment bank.

The agreement on the $100 billion AIIB will then have to be ratified by the parliaments of the founding members, Chinese Foreign Ministry spokesman Lu Kang said at a daily press briefing in Beijing.

The AIIB is also the first major multilateral development bank in a generation that provides an avenue for China to strengthen its presence in the world’s fastest-growing region.